AT&T Pisses Off Everybody (Especially Christopher Nolan) For Launching Movies Straight To Streaming

from the right-idea,-wrong-implementation dept

To be clear, AT&T has no shortage of nasty habits, whether we're talking about how the company routinely does too little to thwart criminals eager to rip off AT&T customers, or the way it can routinely be found hoovering up taxpayer money in exchange for, well, less than nothing. But one thing the company did get correct (or at least more correct, more quickly than other counterparts in cable and TV) was that streaming was the future.

Most cable TV companies refused to fully embrace streaming, worried they'd cannibalize existing traditional cable revenue and thinking they could milk a dying cash cow forever. AT&T jumped in with both feet early on, launching a dizzying array of different streaming services. Sure, AT&T then proceeded to lose seven million pay TV and streaming customers in just three years thanks to a series of bone-headed mergers, rate hikes, and idiotic branding choices, but its original instinct to get out ahead of the problem was the right one all the same.

Earlier this month, AT&T announced that Covid had forced it to effectively put a bullet in traditional movie release windows, resulting in the company releasing new Warner Brothers films on streaming the same day they're released in theaters. It's obviously a necessary response to an unprecedented threat, and it comes with some caveats. One, it's only a one-year trial. Two, movies will still hit theaters. Three, you'll probably pay more for home viewing than is sensible. It's likely a temporary shift in tactics that's geared as much toward goosing lagging HBO Max subscriptions as it is public safety.

Still, the decision resulted in no limit of consternation in Hollywood, which was already sore about AT&T's steady parade of layoffs at Time Warner properties (HBO, DC) it acquired in 2018 (promising no limit of amazing synergies), and the general annoyance of having bumbling telecom executives stumbling around a more creative, competitive sector than AT&T's used to. Director Christopher Nolan was particularly pissed off:

"Some of our industry’s biggest filmmakers and most important movie stars went to bed the night before thinking they were working for the greatest movie studio and woke up to find out they were working for the worst streaming service."

Ouch. For a company that's struggling to keep pace with the likes of Amazon, Disney, and Netflix, that's not exactly what you want to hear. Nolan's biggest gripe is that AT&T, in a rush to drive HBO Max streaming adoption and please Wall Street, doesn't really understand what it's dismantling as it works to pivot from brick and mortar releases to the virtual world:

"Nolan said that the Burbank, CA lot was “dismantling” an ideal distribution system between theaters and homes “as we speak. They don’t even understand what they’re losing. Their decision makes no economic sense and even the most casual Wall Street investor can see the difference between disruption and dysfunction."

Of course this being Hollywood, a chunk of this is just errant hyperventilation. Hollywood has long despised any attempt to disrupt the traditional movie release window, despite the fact it's an antiquated construct that doesn't make a whole lot of sense during the broadband and streaming era. This is not an industry that takes change or disruption particularly well, and that's pretty well evident here.

But it would be a mistake to suggest this is entirely just Hollywood being afraid of change, and Nolan's not entirely wrong.

Having written about AT&T for twenty years I can assure you the company doesn't really know what it's doing in the entertainment space. AT&T's good at two things: running networks and lobbying the government to kill competition. And while it tries to hire competent entertainment-sector executives (like Warner Brothers Chief executive Jason Kilar) those executives will, sooner or later, run up against rigid-minded executives from a government-pampered telecom monopoly that don't really understand (or care to understand) how creative ventures work.

That was reflected in AT&T's early streaming headaches, it's reflective at the consternation at HBO and DC Comics, and it's also apparent here. Despite a lot of pretense to the contrary, AT&T is making it up as it goes along:

Nolan claims AT&T didn't really bother to fully consult with Warner Brothers folks before undergoing such a massive pivot, one that's going to hit union employees particularly hard (something I'd wager, based on its history, AT&T's not too broken up about):

"The director called the decision by WarnerMedia, owned by tech giant AT&T, as devaluing billions in film assets “by using them as leverage for a different business strategy without first figuring out how those new structures are going to have to work, it’s a sign of great danger for the ordinary people who work in this industry."

Dune director Denis Villeneuve was even more blunt in a piece at Variety:

"There is absolutely no love for cinema, nor for the audience here. It is all about the survival of a telecom mammoth, one that is currently bearing an astronomical debt of more than $150 billion. Therefore, even though “Dune” is about cinema and audiences, AT&T is about its own survival on Wall Street. With HBO Max’s launch a failure thus far, AT&T decided to sacrifice Warner Bros.’ entire 2021 slate in a desperate attempt to grab the audience’s attention."

Again, this is all a bit more complicated than Hollywood being a disruption-phobic baby (though that's absolutely part of the equation). Everything about AT&T's venture to dominate streaming has been a convoluted mess, including the $200 billion in megamergers that saddled AT&T with so much debt it resulted in an investor and consumer revolt. So while pivoting hard(ish) to home releases is the right move at the right time, there's absolutely no indication that AT&T's the kind of company capable of doing a good, conscientious job at it based on what we've seen so far.

In short, AT&T's right to adapt to the historic health threat at hand by pivoting hard to streaming, but creatives under the AT&T/Time Warner flag are also probably right to worry that a pampered telecom monopoly with a long history of dodgy ethics will do a crappy job at it.

Filed Under: chris nolan, covid, day and date, hbo max, home release, movies, release windows
Companies: at&t

Stupid Cable TV Retrans Feuds And Blackouts Make Their Way To Streaming TV

from the meet-the-new-boss dept

For the last decade or so, U.S. cable TV customers have been plagued by a steady parade of content blackouts as cable providers and broadcasters bicker over new programming contracts. For the end user, so-called "retransmission feuds" usually go something like this: a broadcaster demands a cable company pay significantly more money to carry the same content. The pay TV provider balks, and one side or the other blacks out the aforementioned content. Consumers spend a few months paying for content they can't access, while the two sides bitch at each other and try to leverage consumer anger against the other guy.

After a while a new confidential deal is struck, customers face a higher bill, and never get any sort of refund for missing content. Wash, rinse, repeat. Over and over again. With regulators largely sitting on their hands as consumers get the short end of the stick.

While some might think the innovative streaming revolution is going to fix stupidity like this, evidence suggests that's not likely. While a different variety of feud, AT&T and Roku have been in a standoff preventing AT&T's HBO Max from appearing on Roku devices. And last week, Sinclair-owned CBS stations were pulled from Hulu completely because the two sides couldn't put on their big boy pants and agree to a new contract without taking it out on paying subscribers:

"Hulu is next in the line of cable providers and streaming services to lose locals due to disputes with broadcasters. Some viewers started receiving scrolling on-screen notices over the weekend, letting them know that their CBS station could be removed from Hulu."

This being Sinclair's particular brand of highly partisan, homogenized disinfotainment, many won't care that they lose access to these networks. Sinclair obviously cares, given that fuboTV, YouTube TV, and SlingTV (Dish Network) removed the company's costly regional sports channels last year from their own streaming lineups, contributing to a $4.18 billion loss for Sinclair in the third quarter. But this sort of stuff is only going to get more common and probably dumber, as broadcasters relentlessly try to extract more and more money from already frustrated consumers during an historic health and economic crisis.

For years, even Wall Street stock jocks have warned that the broadcast industry's relentless price hikes simply aren't sustainable. It's creating a sort of death loop where broadcasters demand more money, cable companies acquiesce and raise rates, and consumers, realizing they're better off skipping TV and reading a book or watching TikTok after several rate hikes each year, finally cut the cord. And while competition from streaming has certainly helped the sector in terms of more flexible choices and lower rates, many of the pay TV sectors dumbest and most self-harming tactics are starting to come along for the ride.

That means a steady parade of rate hikes that erode the value proposition of your monthly streaming subscription, and the routine blackouts and disputes that result in you paying more money for content you can't access. It would be relatively simple for a regulator to bar consumer-harming blackouts during negotiations (or at least ensure consumers are compensated for losing access to content they pay for), but this being a country where consumer protection policy is usually set by industry (which is why there often isn't any), that doesn't seem likely anytime soon.

Filed Under: content blackouts, hbo max, retransmission, streaming
Companies: at&t, cbs, hulu, roku, sinclair broadcasting

AT&T, HBO Put Another Bullet In Antiquated Theatrical Release Windows

from the inevitability dept

Among the dated and dumb business concepts exposed as folly during the pandemic is the traditional Hollywood film release window, which typically involves a 90 day gap between the time a move appears in theaters and its streaming or DVD release (in France this window is even more ridiculous at three years). The goal is usually to "protect the traditional film industry," though it's never been entirely clear why you'd protect traditional theaters at the cost of common sense, consumer demand, and a more efficient model. Just because?

While the industry has flirted with the idea of "day and date" releases for decades (releasing movies on home video at the same time as brick and mortar theaters), there's long been a lot of hyperventilation on the part of movie theaters and traditionalists that this sort of shift wasn't technically possible or would somehow destroy the traditional "movie experience," driving theaters out of business.

The pandemic has changed everything. To the point where AT&T/HBO this week announced that the company's entire lineup of 2021 films will be released on the company's streaming platform (HBO Max) the same time it hits theaters. There are some caveats: it's a one year trial, and movies will only appear on HBO Max for a month before they disappear (though they may return later). You'll also probably pay far more to watch these movies than it's worth. But it's still a sensible shift given the circumstances, as Warner Brothers (AT&T) made clear it a statement:

“We’re living in unprecedented times which call for creative solutions, including this new initiative for the Warner Bros. Pictures Group,” said Warner Bros. CEO Ann Sarnoff. “No one wants films back on the big screen more than we do. We know new content is the lifeblood of theatrical exhibition, but we have to balance this with the reality that most theaters in the U.S. will likely operate at reduced capacity throughout 2021.”

Yes, it sucks for those whose livelihoods rely on traditional brick and mortar theaters. But these are the same theaters that saw the writing on this particular wall long before COVID came to town, and decided to spend much of their time pouting instead of adapting for the inevitable. Even then, traditional theaters will someday bounce back, buoyed by those who feel a trip out to the movies is an essential cornerstone of everyday life. It's just not going to be until vaccines are commonplace and congregating indoors for prolonged periods is no longer a potential death sentence.

This isn't exclusively about the pandemic, of course. AT&T has been losing traditional TV and streaming subscribers hand over fist after a bunch of expensive mergers, branding confusing, and other executive incompetence. They're running behind giants like Netflix and others, and want the added attention. Scuttlebutt also suggests the company is hoping to use the announcement to pressure Roku into carrying HBO Max and ending their longstanding feud:

Either way, it's another step in the right direction toward no longer embracing antiquated concepts like release windows that no longer make sense in the broadband era. This being AT&T there's almost certainly going to be dumb caveats tied to these releases (ridiculous pricing probably being among them), but baby steps and all that.

Filed Under: day and date, hbo max, hollywood, movie theaters, release windows, streaming
Companies: at&t, hbo

After 100 Years As A Bullying Gatekeeper, AT&T Pivots To Whining Unironically About Bullying Gatekeepers

from the comes-around-goes-around dept

For decades, incumbent broadband and television giants like Comcast and AT&T enjoyed life from a comfortable position of monopoly dominance. If you want to subscribe to broadband, such companies are often your only option. If you wanted to subscribe to television service, you were required to rent a locked down, highly proprietary cable box courtesy of the industry's cable hardware monopoly. Are you a broadcaster and want to have your cable channel in a conspicuous position in the lineup? Expect headaches. Want to use their utility poles to build a decent competitor? Expect a lot of bullshit.

Natural monopolies are a pain in the ass. Telecom monopolies like AT&T, whose domination spans the better part of a century, are a very particular type of pain in the ass. But with cord cutting and the rise of streaming changing at least part of their business equations, it's interesting to watch how these giants of yesterday are now struggling to adapt to a new era in which they not only no longer dominate, but often have to collaborate.

Case in point. Before its 2015 merger with DirecTV and 2018 merger with Time Warner, AT&T -- a company with a thirty year track record of obvious, documented, monopolistic behavior -- told anybody who'd listen that there was simply no way that the company would use the greater scale from its merger ambitions to behave badly.

While U.S. District Court Judge Richard Leon bought into that nonsense, AT&T quickly set about proving to everybody that critics were right to worry. It set about abusing its broadband monopoly to thwart streaming competitors, drove up TV prices on consumers and competitors alike, and began withholding HBO content from competitors. All things it swore to the courts it wouldn't do, and all while its lobbyists set about dismantling consumer protections (like net neutrality rules) designed specifically to thwart this kind of behavior.

As AT&T attempts (poorly) to pivot toward the cord cutting generation, the company is suddenly finding itself in an alien predicament: it has to innovate, collaborate, and compete. But with companies like Roku and Amazon now dominating the streaming hardware space, AT&T's been having a hard time bullying them into carrying its streaming platform. In turn, AT&T has gotten a bit pouty as it tries to explain why, despite all this bullying, posturing, bullshit, and market domination, it still managed to lose nearly 1 million TV subscribers last quarter and nearly four million subscribers in just the last few years:

"AT&T’s chief executive, John Stankey, had some harsh words for Amazon on the earnings call after the report. “We’ve tried repeatedly to make HBO Max available” on Amazon, he said. “Unfortunately, Amazon has taken an approach of treating HBO Max and its customers differently than how they’ve chosen to treat other services and their customers."

Not that intellectual consistency is a thing we do anymore in the United States, but some observers justifiably found AT&T's whining a bit ironic:

Maybe it's just me, but a 30 year natural monopoly gatekeeper that just got done lobbying to kill net neutrality rules (designed to ensure AT&T couldn't abuse its broadband monopoly) pivoting unironically to complaining about unfair treatment is... kind of funny?

The truth is that while Stankey tries to blame Amazon for its predicament, most of AT&T's wounds are self-inflicted. Despite the company getting a $42 billion tax break from the Trump administration in exchange for doing less than nothing, and despite billions more in Trump administration regulatory favors designed to protect AT&T's dominance (like neutering the FCC from within or killing broadband privacy rules), and despite spending $150 billion on megamergers to dominate the sector... AT&T's still losing pay TV subscribers hand over fist.

Why? One, because AT&T's streaming market entry strategy was such a confusing branding mess, it wound up confusing even the company's own employees. Two, because the bullying strategies that work in the uncompetitive broadband sector, don't work in a sector with actual competition, and a need for innovation and collaboration. Three, because AT&T spent $150 billion on mergers, then tried to extract that money from its customers in the form of rate hikes, seemingly oblivious that the entire point of "cord cutting" and streaming for the end users is greater flexibility at lower costs.

The lion's share of AT&T's troubles right now are self-inflicted, yet a natural monopoly whining about being treated unfairly does at least bring some much needed entertainment value during these dark times.

Filed Under: competition, gatekeeper, hbo max, john stankey, streaming, streaming tv
Companies: amazon, at&t